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Key Points

• Costco's growth rate has been consistently positive over the past five years, amid varying macroeconomic conditions.

• The company is going to try to keep prices from rising, despite tariffs.

• The stock's high valuation, however, is steep with respect to earnings and is well above its five-year average.

The stock market is in turmoil due to tariffs this year, and one sector that's taking a big hit is retail. The SPDR S&P Retail ETF has declined by more than 14% since January, as investors worry about rising costs yet again for many retailers.

But one stock that has been able to avoid this sell-off thus far is Costco Wholesale (NASDAQ: COST) -- it's up more than 6% year to date (at the time of this writing). Can this be a safe stock to invest into right now, even if you're worried about more volatility and a potential bear market?

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Costco's business continues to show resiliency

What has made Costco a fantastic growth stock to invest in over the years is its continued dominance in retail. Consumers continue to flock to its stores in search of great value. And provided that you aren't looking to buy in modest quantities, you can often buy in bulk to save considerable money. The numbers don't lie, and Costco has been consistently generating positive growth for years, even as other retailers have struggled.

Costco's strong ability to negotiate low prices with its vendors can also make it less vulnerable to the effects of tariffs. CEO Ron Vachris hopes to offer stability for the company's customers, stating on Costco's recent earnings call that, "Our goal will be to minimize the impact of related cost increases to our members."

If it can do that successfully, then this trend of positive growth may very well continue in upcoming quarters. But the growth rate may not be the biggest question mark around the stock these days. That may have to do with its growing valuation.

Is Costco's valuation too rich?

Costco's stock has risen by more than 200% in the past five years, which is more than double the S&P 500 index's returns of around 90% over the same time frame. That surging stock price means that investors who buy shares of Costco today are paying a hefty premium.

At a price-to-earnings multiple of more than 56, Costco's stock is trading well above its five-year average of 43. The danger in paying such a high multiple for the stock is that leaves no margin of safety.